Does a Sole Source Contractor (SBIR Phase III or otherwise) have the right to turn down work? If so, are there any statutes/regulations to help defend themselves in the event a person makes a threatening comment?
The PM's demand and comment are out of line.
FAR 43.102(a) Only contracting officers acting within the scope of their authority are empowered to execute contract modifications on behalf of the Government. Other Government personnel shall not…(3) Direct or encourage the contractor to perform work that should be the subject of a contract modification. [emphasis added]
Any contractor, including a sole source contractor, has the right to not agree to a contract modification. A contract modification, other than an administrative matter, is a bilateral agreement between the parties to change the original contract in some manner. This change could be a deletion or addition of work. This change most likely involves a reduction or addition of funds and, therefore, requires bilateral signatures from both the contractor and the Government.
The PM is out of line threatening the contractor and the Contracting Officer should intervene and discuss this with the PM. If needed, your Legal representative can be a part of that discussion. The contractor is only required to perform to the conditions of the current contract and nothing beyond that scope.